June 23, 2021
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'Learn From Tata And Oberoi'

The man who headed the panel on 'Making Mumbai an International Financial Centre' on where the maximum city falls short on security, why it lacks crisis infrastructure and what - and from whom - the politicians and bureaucrats could learn

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'Learn From Tata And Oberoi'
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Where do you feel Mumbai falls short on security when compared to commercial hubs like Dubai, Singapore, etc?

First, Bombay's local forces of law and order, i.e. the local police and ATS, are (as was amply demonstrated) inadequate, insufficiently equipped, and too poorly trained, to combat the kind of 'professional' terrorism inflicted on the city several times in the last fifteen years. That was apparent in their performance, as witnessed around the world on millions of TV screens. They were put to a severe test. They failed. The body language of the local police (as distinct from the Army, Navy and NSG commandos) suggested a casualness of response, total bewilderment and inability to cope. That is not simply a shortcoming of the local police force and ATS per se. It has deeper political roots. 

Second, what happened is emblematic and symptomatic of state-level political failure and callous disregard on the part of political leaders in the city and state for citizens' safety. They did not learn anything from past experience. They did not ensure that a city as significant as Bombay in the economic life of India, had put in place the protection it so obviously needed; i.e. in the form of localised and instantly deployable human and organisational counter-terrorism capability. That was what bothered Ratan Tata. It should bother all of us.

Third, this experience highlights what happens to our security when local police capability gets as politicised as it is in this city and state. It then loses sight of what it exists to do. Our state home minister seems more concerned about the threat to our morality from dance bars, than the threat to our lives from committed terrorists intent on wanton, cowardly, mindless killing and destruction. Our police force has had the focus of its attention diverted by local goons and thugs, masquerading as political leaders, perpetrating their own form of continuous low-intensity terrorism, by playing on ethnic and lingual divisions, and attempting to subordinate the primacy of Indian nationality to the base claims of petty state ethnicity. This incident highlighted the role of Indians from north and south India who fought and died to save the city; despite the antagonism generated against them by local pygmies bent on cheap electoral gains. Where were our ethnic champions when Bombay was attacked? They were invisible.

In Dubai, Singapore, as well as in London and New York the opposite to all the above was true. In unitary states (the first three above) the response to terrorism was instantaneous, aggressive, centralised, and professional. In New York, federal, state and city level security agencies worked hand-in-glove as one to achieve a common purpose.

In Bombay by contrast we first had police intervention which failed at the first hurdle; then we had Army, then Navy and finally the NSG commandos. The last were airlifted into Bombay from Delhi, after a delay of several hours. That, almost certainly, cost many innocent lives. Amazingly, they were transported in BEST buses (which could easily have been taken out by terrorists had they been around en route) to the affected sites. How many agencies and command structures were involved? What were the coordination demands? How well were they met? Contrast the leadership of Rudy Giuliani in New York on 9/11, to the 'leadership' (???) we saw in Bombay on the part of its Mayor, Home Minister, and Chief Minister. They were invisible; as were the politicians who loudly trumpet ethnic supremacy every day, but are nowhere to be seen when real security issues are at stake and the bullets are flying.

Yes, finally our NSG commandos prevailed. But after how long? How could a handful of terrorists in three locations keep such overwhelming force (Police, Army, Navy, NSG) at bay for so long before succumbing? Yes, they were professional, committed and suicidal. But weren't our forces equally committed and professional? Yes, we needed to prevent collateral damage. But given the number of Indian and foreign lives lost, how successful were we in doing that? We need to ask ourselves these questions seriously and answer them honestly, before lapsing into our usual mode of misplaced self-congratulation about questionable success, followed by total political and administrative lethargy, if we are to learn from this experience for the future.   

Tata Group chairman Mr Ratan Tata has flayed the government for failure to put in place a crisis infrastructure. Given the lack of a cohesive political thinking or plan on combating terrorism, do you feel industry could show the way forward in any way? What lessons can New York or London offer Mumbai?

Your question implies such a total failure of the city, state and central administrations in performing their most basic and essential duties (that of assuring the safety of citizens and their property) that no confidence is left in the ability of government (at any level, centre, state or city) to perform even the most primary and essential of its functions. If that implication is extruded into privatising our security apparatus, what plight has our country, state and city come to? Can industry and the private sector really take over this function and privatise our security? Can industry really direct the local police force as well as national security agencies? There are countries and states in which security is privatised and private armies rule the roost. Is that what we want in India and Bombay?

One simplistic answer to your question would be for industry to hire qualified mercenaries to do what the state, city and centre have shown themselves unable to do properly. In India that is not a tenable alternative. Its consequences would be unthinkable. The cure would be much worse than the disease.

Another answer would be for industry to provide the funds, the strategic direction, planning and response capability for an effective counter-terrorism agency in Bombay that is professionally staffed, trained, equipped, committed and effective. But that would need to dovetail with state and central capability to be really effective. In both cases present arrangements are highly deficient. Also, if corporates provided the funding and strategic direction to fight terrorism in Bombay the political pygmies who think they run anything (other than their own runaway greed) would need to take a back seat and stay out of the picture. Otherwise they would waste the funds and misdirect the resources provided.  

What corporate India and the citizens of Bombay can/must do is to turn the heat up on political leadership which has so obviously failed and put in place effective monitoring mechanisms over the post-election behaviour which ensures that such failure does not occur ever again.

In New York and London, neither the state nor the city has abdicated its responsibilities and looked to corporates to do what they  should be doing. They are determined to do what they must. Otherwise what is a 'state'? If it cannot protect its citizens, why does it need to exist? 

Finally, let me say when it comes to corporate India, that the real heroes of what happened in Bombay were the managers and staff of the Taj and Trident/Oberoi. Their behaviour was so selfless, so exemplary, that all of us could learn from it. In terms of devotion to duty, doing what they were paid for (and so much more), and saving hundreds of precious lives through their timely thinking and quick actions, at a cost to their own lives and those of their families, they did more than anyone, including the commandos. Their extraordinarily example of courage and selflessness, should make all of us humble and proud. They showed what was best about India. By contrast, our political establishment highlighted what was worst.  Perhaps we should learn from those incredible, courageous people not from our politicians. What their staff did, also says volumes about the corporate culture of the Tata and Oberoi groups and their leadership. Perhaps it is that kind of culture -- of doing your duty, caring for others before yourself, putting your customer first, and saving whomever you can -- that our politicians/bureaucrats are lacking in. They could learn from Ratan Tata and Bicki Oberoi how to inculcate such a culture.

What could be the fallout on business in terms of cost and liabilities in the wake of continuing terrorist attacks? Could greater security and insurance cover become a way of life for operating in Mumbai in particular? 

If these kinds of terrorist attacks are repeated again, Bombay, Maharashtra, and GoI will lose all credibility in the eyes of Indians and of the world. They would send a powerful signal to domestic and foreign investors (FDI, FII, NRI) that the city, state and centre are not worthwhile places to invest in, or do business in, simply because governments at all levels are unable to perform their most basic functions of assuring safety and security of life or property. Against this background of experience, it would take an unusually unintelligent insurance agency to provide insurance cover against terrorist attacks, except at premiums so unaffordable as to make doing business in Bombay impossible.

Given that India is not alone in facing terror attacks, do you feel it could limit the adverse business sentiments of foreign companies operating or planning investments in Mumbai? If not, what could be the impact on the business sentiments of MNCs?

It is true that India is not alone in facing terrorist attacks. But the repeated number of such attacks, and the helplessness that the Indian state has shown in not preventing them (quite the opposite because the intensity and devastation of such attacks has increased), suggests that in contrast to other victims, India is a particularly 'soft state'. It simply absorbs body blow after body blow and seems incapable of fighting back effectively. Pointing the finger at Pakistan (which has totally lost control of its ISI and jehadi movements), and threatening to take action against it, will be about as effective as George Bush attacking Iraq to punish Osama bin Laden. The perception that India is a soft state incapable of defending its own interests on its own soil, will embolden the global terrorist movement not just to attack Indian interests, but to attack the interests of other countries (particularly the US and UK which are most involved in the war on terror) in India. It will be cheaper and more effective for them to do so. If that tendency and perception takes hold then the implications cannot possibly be good for investments in India and even less so for investments in Bombay or Maharashtra.  

A year after your panel submitted its report on how to make Mumbai an international commercial hub, are you hopeful of any forward movement?

Being an eternal optimist I live in hope. Perhaps I am incapable of learning or recognising reality. In some senses, actions have been taken by MoF, RBI and SEBI to implement many of the less obvious recommendations of the MIFC Report in introducing futures and options in currencies and soon in interest rates. But these are very small steps on a very long journey. Earlier I thought it would take India years to compete in the international financial services arena. But the implosion of western financial institutions has brought forward that opportunity by several years.

Unfortunately I see neither the resolve nor the inclination on the part of the authorities to seize those opportunities in a bold rather than incremental manner. Contrary to all logic, we have begun to believe that our financial primitivism has saved us from calamity. It has also deprived us of many advantages over the years, and has resulted in egregious misallocation of resources and sub-optimal use of capital.

I am amazed to hear anyone extol the virtues of the first Mrs. Gandhi's decision to nationalise India's banking system. That reflects a degree of profound economic ignorance that is truly earth-shattering. In my view, the Nehruvian decision to opt for Soviet style socialism in managing our economy, followed by his daughter's decision to nationalise banks for short-term political advantage but to India's substantial long term cost, were two of the most disastrous decisions ever taken by the Indian authorities.

Had we opted for the available alternatives, arguably our per capita income today would have been $4,000 not $1,000; and it would have more equitably distributed. But in a political climate that emphasises and propagates such ridiculous canards, with no empirical backing or evidence for short-term populist electoral credibility, I am not as hopeful about progress, on Bombay becoming an international financial centre within the next ten years, as I would like to be. We will need much better understanding on the part of our political leaders about how modern economies work (despite the obvious market failures and excesses we are witnessing right now which will eventually correct themselves) before we can take assured steps toward India taking its rightful place in the world as one of its largest and most powerful economies. We certainly won't get there with the kind of ignorant political leadership we have today! 


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